The paper on Indian Pharma Industry, 'Quest for Global Leadership', gives reasons for this growth, emphasising that indigenous pharma market is expected to be largely driven by new product launches, especially new branded drugs by foreign firms in next four years.
The growth rate thus is likely to reach its peak by 2008-09, after which it may stagnate with a few new product launches, adds Assocham Cygnus Paper.
Between 2000 to 2005, domestic pharma industry grew at a CAGR of about 9.5 per cent and touched the market size 5.13 billion dollars by March 2005.
However, towards March 2006, the growth rate jumped to 11 per cent to hit the market size of 5.7 billion dollars, further adds the paper, forecasting that it will hover around 13.6 per cent between 2006-10 to take up domestic pharma market size at 9.48 billion dollars by 2010.
The paper points out that indigenous pharma market in value terms accounts for one per cent of global pharmaceutical market and eight per cent in volume terms.
Market growth before 2005 of domestic pharma industry was primarily driven by a number of new product launches by both Indian and foreign company. The Indian market started to attract a number of foreign players with the implementation of product patent in January 2005.
The FDI in pharma industry is estimated at 172 million dollars during 2005-06, recording a CAGR of 62.6 per cent during the period beginning 2002-06.
According to estimates, contract research and manufacturing (CRAMS) market in India was valued at 532.10 million dollars in 2005, of which contract manufacturing accounted for 84 per cent of the total market, while the remaining 16 per cent was accounted by contract research excluding clinical trials.
Both the segments of CRAMS have registered a robust growth of over 40 per cent in 2005 over the previous year.
Assocham President Anil K Agarwal said, with recent CRAMS agreements, it estimates that the clinical trial market in India will be 200 million dollar by 2007 and one billion dollar by 2010.
The contract manufacturing market is expected to reach 900 million dollar by 2010, he added.
On clinical trials, the paper comments that in 2005, the industry for clinical trials in India was 100 million dollar. This market is growing at an accelerated pace. India offers a lot of advantages in the clinical trials domain such as cost advantage compared to Western countries.
On advantages offered by India in CRAMS and clinical trials domain as per the paper say, today the cost of hiring a medicinal chemist in the US is very high, around 250,000-300,000 dollar per year. The US pharma industry employs roughly 50,000 chemists. Indian discovery research outfits charge global pharma companies around 60,000 dollar per chemist which is roughly one-fifty of what the pharma companies pay abroad.
While it is difficult to pin down an average pay for chemists in India for doing a similar work, conservative estimates suggest it to be around Rs one million per annum. So it is a win-win situation as the overseas pharma saves about 50 per cent cost and the Indian company makes it about 50 per cent margin.
On increasing R&D spend of Indian companies, the paper highlights, major pharmaceutical companies in India are the main R&D investor in the country. The R&D spend (capital and current) by these major companies has grown at CAGR of 38 per cent during the period 2000-01 to 2005-06.
In 2005-06, the R&D expenditure of 50 major companies totalled 495.19 million dollar growing at a rate of 26 per cent over the previous year.
UNI SRS SSC BD1328